Evaluating the benefits of formal planning systems

Abstract

While empirical studies indicate that formal planning influences corporate effectiveness, no systemic understanding exists regarding how and why formalization of the planning activity affects corporate performance. This article proposes a framework for analyzing the impact of formalization on the quality of the planning exercise. It is suggested that by formalizing the planning activity, certain benefits accrue which cannot result from informal planning. Also, the intrinsic purposes of planning are furthered in several ways by formalization. However, there are also disadvantages resulting from formalization, some inherent and some arising from faulty design. The consequences of formalization with respect to the generally accepted purposes of planning are examined and a checklist intended to help designers develop more effective formal planning systems is proposed.